The Difficult Task of Getting the New NAFTA Through Congress

The new NAFTA -- AKA, the USMCA here in the U.S., but different acronyms in Canada and Mexico -- has now been signed. With apologies to the hard-working negotiators, that was the easy part. Now the Trump administration has to get Congress to sign off.

“I want to remind everyone that this was negotiated from the beginning to be a bipartisan agreement,” Lighthizer said on Nov. 30 after the signing of the U.S.-Mexico-Canada Agreement on the sidelines of the G20 summit. “Democrats were involved from the beginning, the middle and the end. I seldom go a day without talking to one of the Democratic leaders -- and the same thing is true of the Republicans. The president’s instruction to me from the beginning [was] that he wants a bipartisan agreement."

“I think we will get the support of a lot of Democrats -- a very high number of Democrats -- absolutely; I have no doubt about it. Now, will we have to emphasize some things in the implementing bill? Of course. And I’m in discussions with a variety of Democratic leaders on those points and they will be very much involved in the process moving forward and will have a strong influence on how we put things together because I want them not only to vote for it, I want them to be happy,” Lighthizer said.

I think this may be more challenging than he is letting on. With a Republican-controlled Congress, it might not have been so difficult. However, with the Democrats in charge of the House, this looks complicated to me.

If the Republicans had full control, I could see how the Trump administration would use a withdrawal threat to its advantage. Sign off on the new NAFTA, they would say, or else they will withdraw from the old one, creating international and domestic law chaos. NAFTA supporters in the GOP would panic and agree, even if there were things in the new NAFTA they didn't like (e.g., the scaling back of ISDS, protections against gender discrimination, etc.).

But the Democrats are in a different position. First of all, many of them don't like NAFTA to begin with, so a withdrawal threat wouldn't feel so threatening. Furthermore, a withdrawal threat could lead to an internal GOP war over trade policy, which would be wonderful for the Democrats. This all puts the Democrats in a pretty good spot to make demands.

So what might they demand? Here are a few of the more extreme possibilities:

-- get rid of the investment chapter entirely.

-- give labor unions a private right of action like the one foreign investors have under ISDS.

-- let the Labor Department have control over whether to bring complaints under the labor chapter.

-- demand some new (and enforceable) language on climate change.

-- get rid of the biologics protections.

Obviously, the Republicans will hate all of these demands.

So how much will Democrats demand, and how much will Republicans be willing to give? Honestly, I have no idea, but it's going to be really interesting to watch it play out.

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The Difficult Task of Getting the New NAFTA Through Congress

The new NAFTA -- AKA, the USMCA here in the U.S., but different acronyms in Canada and Mexico -- has now been signed. With apologies to the hard-working negotiators, that was the easy part. Now the Trump administration has to get Congress to sign off.

“I want to remind everyone that this was negotiated from the beginning to be a bipartisan agreement,” Lighthizer said on Nov. 30 after the signing of the U.S.-Mexico-Canada Agreement on the sidelines of the G20 summit. “Democrats were involved from the beginning, the middle and the end. I seldom go a day without talking to one of the Democratic leaders -- and the same thing is true of the Republicans. The president’s instruction to me from the beginning [was] that he wants a bipartisan agreement."

“I think we will get the support of a lot of Democrats -- a very high number of Democrats -- absolutely; I have no doubt about it. Now, will we have to emphasize some things in the implementing bill? Of course. And I’m in discussions with a variety of Democratic leaders on those points and they will be very much involved in the process moving forward and will have a strong influence on how we put things together because I want them not only to vote for it, I want them to be happy,” Lighthizer said.

I think this may be more challenging than he is letting on. With a Republican-controlled Congress, it might not have been so difficult. However, with the Democrats in charge of the House, this looks complicated to me.

If the Republicans had full control, I could see how the Trump administration would use a withdrawal threat to its advantage. Sign off on the new NAFTA, they would say, or else they will withdraw from the old one, creating international and domestic law chaos. NAFTA supporters in the GOP would panic and agree, even if there were things in the new NAFTA they didn't like (e.g., the scaling back of ISDS, protections against gender discrimination, etc.).

But the Democrats are in a different position. First of all, many of them don't like NAFTA to begin with, so a withdrawal threat wouldn't feel so threatening. Furthermore, a withdrawal threat could lead to an internal GOP war over trade policy, which would be wonderful for the Democrats. This all puts the Democrats in a pretty good spot to make demands.

So what might they demand? Here are a few of the more extreme possibilities:

-- get rid of the investment chapter entirely.

-- give labor unions a private right of action like the one foreign investors have under ISDS.

-- let the Labor Department have control over whether to bring complaints under the labor chapter.

-- demand some new (and enforceable) language on climate change.

-- get rid of the biologics protections.

Obviously, the Republicans will hate all of these demands.

So how much will Democrats demand, and how much will Republicans be willing to give? Honestly, I have no idea, but it's going to be really interesting to watch it play out.